In January-March 2022 (Q1 2022), total rental housing demand (searches) in 13 Indian cities jumped by about 15.8% quarter on quarter (QoQ) and 6.7% year on year (YoY), while the cumulative rental housing supply (listings) increased 30.7% QoQ and 101.5% YoY across the cities mapped, reveals Magicbricks’ India Rental Housing Update.
The search volumes in Gurugram, Delhi, Noida, Bengaluru, and Ahmedabad witnessed the highest growth of 33.5%, 27.8%, 21.4%, 19.4%, and 17.6% QoQ, respectively. On the supply front, Navi Mumbai, Thane, Pune, Mumbai, and Chennai witnessed the maximum growth of 40.9%, 40.9%, 38.1%, 37.6%, and 36.3%, respectively. The supply of rental units witnessed a major hike due to completion of under-construction properties, which were affected due to the pandemic.
The rental housing demand improved across the major Indian cities against the backdrop of a milder third wave of the Covid-19 pandemic as the reopening of many offices resulted in many employees returning from Tier 2 and 3 cities.
The pan-India rental rates witnessed a growth of 4% QoQ, displaying improved strength of the rental housing market in the country. The rental rates in Mumbai saw an upward movement of 4.5%.
According to the report, most tenants (45%) prefer 2 BHK, followed by 3BHK (31%) and 1 BHK (19%) configurations. They also prefer semi-furnished (53%) apartments in multistory (69%) buildings.
Commenting on the same, Sudhir Pai, CEO, Magicbricks, said, “With a milder-than-expected Covid-19 third wave and extensive vaccination drives, many offices had rolled out hybrid working plans from the beginning of this year. They started with bringing employees back to the office at least two to three times a week. As a result, many employees returned to the metros from their hometowns, and the rental housing market saw a sharp demand recovery in the first quarter of the year.”
“Further, with educational institutions also opening up, many families and college/university students also started returning to the metros. We expect this trend to continue for the next few quarters as offices move towards higher occupancies and operations, leading to an improved rental housing market as well,” he added.
The report concludes that there is an increase in the demand for rental housing near employment hubs and educational institutions as people return to metros with schools and offices opening up.
Macro trends spotted from Magicbricks’ India Rental Housing Update, Q1, 2022:
* In Q1 2022, the aggregate demand (searches) across the 13 cities increased 15.8% QoQ and 6.7% YoY. Gurugram, Delhi, Noida, Bengaluru, and Ahmedabad registered a growth of 33.5%, 27.8%, 21.4%, 19.4%, and 17.6% QoQ, respectively.
* The cumulative supply (listings) increased 30.7% QoQ and 101.5% YoY, with Navi Mumbai, Thane, Pune, Mumbai, and Chennai observing maximum growth of 40.9%, 40.9%, 38.1%, 37.6%, and 36.3%, respectively.
* The pan India rental rates increased 4% QoQ, alluding to improvements in the rental housing market of India.
* 45% of tenants prefer 2 BHK, followed by 31% and 19% for 3BHK and 1BHK, respectively. Greater Noida, Hyderabad and Mumbai are the only cities where more than 50% tenants are looking for 2 BHK configurations.
* 37% of tenants in major cities prefer properties within the rental price of INR 10,000 – 20,000 per month followed by 23% for INR 20,000 – 30,000 per month, with 40% of the rental supply within the price range of INR 10,000-20,000 per month.
* 53% of the tenants in major cities prefer semi-furnished rental homes followed by 32% and 15% for unfurnished and fully furnished homes, respectively.
* 69% of the total supply is for multistorey apartments followed by 15% and 14% for independent houses and builder floor apartments, respectively.